TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 1051
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....11-12. 2. The registry has noted a delay of one day in the revenue's appeals. Similarly, delay of 20 days has been noted in assessee's cross-objections. The condonation of the same has been sought by both the sides on the strength of affidavits as placed on record. Keeping in view the period of delay, we condone the delay in the appeals as well as in cross-objections and proceed with the adjudication of the same. 3. The revenue's grounds in AY 2009-10 reads as under:- 1. The order of the learned CIT(A) is contrary to the law and facts of the case. 2. The ld CIT(A) erred in holding that the assessee company is eligible for exemption u/s.11 of the Act and it is not hit by the amended provisions of Sec.2(15) of the Act under the object of "General Public Utility". 3. The ld CIT(A) failed to appreciate that income derived from collection of maintenance fee, user charges, advertising charges, appropriate charges for use of cable/power network, sewage lines etc., exceeds the threshold limit of Rs. 10 lakhs as prescribed under 1st and 2nd proviso to Sec 2(15) of the Act. 4. The ld CIT(A) ought to have appreciated the fact that the Finance Act 2008 w.e.f. 01.04.2009 has made a ve....
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....iary units. The Ld. AO treated these charges as commercial receipts and denied the exemption by relying upon various decisions which differ on facts. 5.2 The Ld. CIT(A), taking note of amended provisions of Sec.2(15) read with CBDT Circular No.11/2008 dated 19/12/2008, proceeded to examine the assessee's activities to ascertain whether they would be hit by proviso to Sec.2(15) particularly when no alteration could be made to assessee's Memorandum and Articles of Association and no amendment could be made to the basic character of the assessee that would be contrary to the provisions of Sec.2(15), 11, 12, 13 and 80G of the Act. Any surplus on winding up was to be transferred to other entities having similar objects and could not be distributed to the members of the assessee. There was no object of profit motive and the ultimate control of the assessee vested with Government though Board of Directors administrating the affairs of the assessee on day to day basis. Therefore applying the ratio of decisions of Hon'ble Supreme Court in CIT V/s Andhra Pradesh State Road Transport Corporation (159 ITR 1) and in CIT V/s Gujarat Maritime Board (295 ITR 561), it was the predominant objective....
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....oncerned, for (he reasons stated above, merely because the assessee is collecting cess or fees which is regulatory in nature, the proviso to section 2(15) of the Act shall not be applicable. As observed hereinabove neither there is element of profiteering nor the same can be said to be in the nature of trade, commerce or business. Likewise, in the case of the appellant, I find that fees has been collected to meet the expenditure while providing general utility service to the units of the industrial estates towards electricity, road, drainage, water etc. Secondly, the ultimate control is with the Government and even accounts are also subject to audit as per Government procedures and there is no element of profit motive at all. Therefore, the activities of the appellant cannot be said to be in the nature of trade, commerce and business conducted with a profit motive. As observed by the Hon'ble High Court of Allahabad in the case of CIT (Exemptions) vs Yamuna Expressway Industrial Development Authority (395 ITR 18) (All) charitable purpose primarily envisages that pre-dominant object must be to promote welfare of general public. Ancillary activity, if any, other than that of the....
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....e appellant did not cease to be charitable in character so as to render it ineligible to claim of benefits u/s 11 and 12. In view of the above, I hold that the Assessing Officer erred in denying the benefits of section 11 and 12 and arriving at the conclusion that the appellant's case falls under the proviso to section 2(15). The Assessing Officer is directed to extend all the benefits of section 11 and 12 to the appellant. The appellant succeeds on this ground. Since Ground No.1 is decided in favour of the appellant, the alternate Ground Nos. 2 to 5 are dismissed as infructuous. Aggrieved, the revenue is in further appeal before us whereas the assessee, in the cross-objections, has assailed various computations made by Ld. AO. 6. We find that Hon'ble Delhi High Court in the case of India Trade Promotion Organization vs. DGIT (Exemption) & Ors. (371 ITR 333), (WP No. 1872 of 2013 dated 22/01/2015) has held that in both the activities i.e. (i) activity in the nature of trade, commerce or business or (ii) any activity of rendering any service in relation to any trade, commerce or business, dominant and prime objective is to be seen. If the dominant objective was 'profit motiv....